Synopsis: In a time when administrative data are frequently used in evaluation research, it is important to define comparable groups of individuals when evaluating treatment outcomes. This presentation compares two alternative methods, propensity score matching and risk adjustment, for modeling evaluation outcomes in health services research. We apply these methods to two out-of-home care alternatives (therapeutic group care and therapeutic foster care) for Medicaid eligible youths in Florida with mental health needs. Results favor use of risk adjustment over propensity scoring models in the prediction of post-discharge outcomes. These methods and their application to future children's services research will be discussed.